After being acquired by Amazon, many sellers received calls from investors!

In the second half of the year, Amazon's brand acquisition enthusiasm remained high, and many sellers received calls or emails from capital acquisition intentions. Some stores were successfully sold after investigation and negotiation, while some sellers received inquiries but never followed up, and were fooled. If you receive an acquisition intention, will you choose to sell your store? Under what circumstances would you choose to sell? Which categories are more likely to be acquired? Let's take a look.

Many sellers received acquisition calls

After overdrawing the dividends of the epidemic last year, it has become significantly more difficult to sell on Amazon this year, and some sellers have begun to consider quitting. Under the influence of internal and external factors of the platform, brand acquisition has become a hot topic.

"Recently, many friends have been discussing the issue of Amazon brand acquisitions. Many corporate investors have come to us and sellers are eager to join us," said an industry expert . Many sellers reported that they had received olive branches from investors, "I received several emails before" and "I received text messages but ignored them."

A seller posted an acquisition intention email from a team at an acquisition company, asking the seller if he had 10 minutes to communicate about the potential acquisition.

(Weibo screenshot)

Why is Amazon’s brand acquisition business so hot?

Seller Qin Jiangang believes that this business has surfaced this year, not because it did not exist before, but because more people want to sell their stores this year. The reasons include: sellers have several brands and stores and want to sell one of them to solve financial problems or relieve some pressure; or they are tired of the high-pressure life of Amazon sellers for many years and are considering selling.

In addition, brand growth has encountered a bottleneck, and it is difficult for sellers to find new breakthrough directions based on existing resources and capabilities, which is also a major reason for choosing to sell the brand.

If you receive an acquisition inquiry, will you choose to sell the store? (Single-choice vote)

Yes. The industry situation is uncertain, and the money earned is in the goods, so it is better to put it in the bag;

No. It is better to keep a steady flow than to sell out the stores. I am more optimistic about the potential of my own brand.

Want to sell, but can’t meet acquisition criteria;

Wait and see. Establish contact first, and then see how the store and platform develop.

There is a strong sentiment for capital acquisition, but some companies are also questioned for "fake moves".

The big V seller mentioned above once received an email from a company saying that they wanted to acquire their Amazon brand store. " They said that after evaluation by their professional team, the quality of our store is excellent. Then they would create a group and send an introduction about their company and the project. Finally, they would let everyone use their third-party tools to conduct valuation, and then there was no further news. " This situation is not an isolated case.

Amazon Store Acquisition Prices Double

With the help of the acquisition business, some sellers have successfully exited, and some have been tempted after seeing their competitors being acquired. So which categories are more favored by buyers?

According to investor feedback, evergreen categories such as home furnishings and pets are more popular. Take the local acquisition company Nebula Brands as an example. It focuses on outdoor sports, home leisure, kitchen baking, mother and baby pets and other fields. The first project it acquired was in the yoga category.

The portrait of its acquisition target can also be used as a reference:

1. On Amazon, the search rankings of subdivided categories are stable and high;

2. High repurchase categories, low-frequency iterations, sales mainly come from a small number of top SKUs;

3. Long-term stable and compliant operation, with no serious warnings or violation records;

4. Gross profit in the past 12 months is greater than US$200,000, gross profit margin is greater than 20%, and revenue maintains a positive growth trend;

5. Sufficient accumulation of on-site reviews, with ratings maintained at good to excellent standards.

Among these points, the brand's current revenue performance will directly determine the final acquisition amount.

The energy group in the brand acquisition track is getting bigger and bigger. According to Marketplace Pulse data, Amazon aggregators raised more than $11 billion in 2021, which only accounts for nearly 2% of Amazon's market GMV, which is the tip of the iceberg. More capital is still pouring in. This year, Amazon aggregators have made hundreds of acquisitions, and next year this number will exceed 1,000.

As the acquisition market heats up, seller valuations have doubled from 2020. Currently, Amazon brand sellers are acquired at an average price of 4x-8x SDE or adjusted EBDITA; at the beginning of 2020, the average valuation of Amazon stores was only 2.5x-3x.

Acquisition companies across the United States, Belgium and other places have targeted high-quality sellers on Amazon, and a large number of sellers are in China. About 600,000 Chinese sellers have generated $135 billion in GMV transactions, accounting for more than 1/3 of Amazon's total market.

However, due to language and cultural factors, there are certain challenges for foreign companies to acquire local sellers. The Amazon yoga vertical head brand mentioned above had contacted several foreign acquisition companies, but after comprehensively considering the success rate of the transaction and future brand participation, it finally chose a local company.

Marketplace Pulse also pointed out that companies focusing on local markets are achieving differentiation. This view is supported.

Nebula Brands, China's first brand acquisition company, receives Series B financing

Recently, Nebula Brands, China's first brand acquisition company, received over 50 million US dollars in Series B financing. This round of investment was led by L Catterton, the world's largest investor focused on the consumer industry, and old shareholders Matrix Partners and Alpha Commune followed suit.

It is understood that the company was founded in 2019 and is committed to helping Chinese brands grow on Amazon through the "capital acquisition + brand operation" model. Compared with overseas buyers, Nebula Brands' localization advantages are obvious:

1. Nebula Brands’ deep penetration into China’s supply chain industry is conducive to efficient supply chain integration

More than 70% of Amazon's product supply chains come from China, so many different products can be integrated into the same factory for production, and even intelligent production scheduling and logistics can be performed. Most of these value creations require local companies to go deep into various links of the industrial belt to complete.

2. Similar cultural concepts bring more flexible trading methods and a high trust foundation

Nebula Brands' core investment and valuation teams are all in China, so they can respond to sellers immediately and communicate with them face-to-face, making it easier to build trust. At the same time, they can more easily understand the business characteristics of Chinese sellers, respect sellers' trading habits, and flexibly formulate communication and transaction plans.

3. Attach importance to establishing long-term partnerships with sellers and share resources to achieve win-win results

Nebula Brands cherishes the sellers' hard work in cultivating their brands and is willing to devote more group resources to share the benefits of brand growth with sellers. Other Amazon businesses that sellers have not sold can also receive support from Nebula Brands' professional teams such as finance and supply chain at cost price.

In the brand acquisition business, Nebula Brands' data experience can help investment and M&A teams quickly identify the business quality and potential of brands on the Amazon platform and make investment and pricing decisions within 24 to 48 hours. From project contact to transaction landing, it can be completed within one month at the fastest. After the account migration is successful, the seller can receive the down payment and continue to receive the final payment or profit sharing in the next 1-2 years.

If the seller is interested in going ashore, or wants to learn more about the local acquisition business, he can add WeChat " Mino-kkiyo " to contact Nebula Brands, or click "Read original text" for quick contact.

Amazon

Acquisition

Nebula

Brands